Wringing Out Revenue From Retroactive Rebates

By Jerry Schmits Director, KLH Energy Solutions | July 06, 2014

Hotels have it tough in the energy game. Unlike retail stores or office buildings, hotels run 24/7 in order to serve guests at all hours. Not only that, but hotels continue to add perks to sweeten the pot for prospective customers. Now hotels must not only offer comfortable rooms, but heated swimming pools, spas, top-notch health centers, 24-hour restaurants, and more. These additional features, along with the hotel industry's doors-always-open business model, guzzle energy and leave hotel owners paying astronomical utility bills.

In fact, hotels and motels spend an average of $2,196 per available room each year on energy, which equates to a total of 6 percent of all hotel operating costs. This is no small number, and for that reason, hotels should be constantly seeking ways to reduce energy consumption and regain lost revenue.
The best way to achieve this goal is to improve energy efficiency from energy sucking systems. These improvements not only reduce energy consumption as a whole, but are often eligible for rebates or tax incentives.

Proactive Versus Retroactive Rebates

Most often, hotel owners choose to pursue proactive rebates. These rebates require owners to identify areas of high energy use, develop an energy reduction plan, and finally preauthorize that plan with the rebating utility company. Then at the completion of the project, the owner receives the rebate. Proactive rebates keep hotel owners motivated to achieve energy efficiency, and if filed correctly, promise a prescribed amount of money upon completion. For this reason, most hotel owners are proactive in their approach to energy efficiency rebates.

However, it's not uncommon for hotel owners to have their rebate application rejected due to incomplete information or documents filed incorrectly. When an application is rejected, statistics show that many are never resubmitted. Despite the marketing efforts of utility companies and state energy regulatory commissions, many rebate opportunities are simply never pursued. The good news is that many rebate providers have provisions in their programs to allow rebate applications to be submitted retroactively- after the qualifying project is complete.

Retroactive rebates are reimbursements that hotel owners can file for after the completion of an energy efficiency project. That way, if an owner originally misfiled an application or discovered a rebate at the completion of a project, they may still qualify for a reimbursement. Typically, owners can file retroactively for the same types of projects, making retroactive rebates a great way for hotel owners to wring out every penny for their energy conscious efforts.

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